Citizens' Issues
2011: A year dedicated to MLM and Ponzi scheme frauds

Moneylife has been in the forefront for highlighting frauds committed by MLM and Ponzi schemes. We hope the government brings a strong regulation to curb such schemes, in the interest of the public at large

If 2010 was the year of great Indian scams, 2011 was rather of ponzi and multi level marketing (MLM) frauds. SpeakAsia managed to top the chart, but soon many others joined the bandwagon, duping gullible investors for several thousand crores.
In India, MLM and schemes promising easy high returns are not unusual. Since the start of this year, Speak Asia was new a buzzword. From college students to housewives, everyone was ensnared by it and invested in the scheme on the promise of easy weekly returns, merely on filling online surveys. Though the company paid the promised income in the beginning, there were certain grey areas in its business model. SpeakAsia was registered in Singapore, and was working in India without any office, and was not registered with registrar of companies.

Moneylife was the first media organisation to raise a red flag regarding the business model of Speak Asia (  Soon its dubious nature was exposed in the mainstream media during its Goa bash that was held in May. Despite ambiguities prevailing in the scheme, the regulators remained tight lipped. Moneylife repeatedly urged the Reserve Bank of India (RBI) to investigate the company’s money trail, since a lot of money was amassed and sent to Singapore. But nothing was done and finally the scheme collapsed, duping 19 lakh gullible investors. Currently the top bosses of SpeakAsia are absconding while other employees are arrested. The Economic Wings (EOW) Department, Mumbai is investigating the scheme. Sources from EOW tell us that already substantial amount of money has reached Singapore.  

Stock Guru India, grabbed headline in April after its founder Lokeshwar Dev, duped investors for whooping Rs1,000 crore (  This fraud company, operating as a self-styled investment advisor, openly flouted norms laid down by the market regulator Securities and Exchange Board of India (SEBI) and offered 120% returns in a year through stock market investment. SGI was not registered with SEBI as an investment advisor, but still offered to trade on behalf of clients. It also operated without any trading licence from the RBI and SEBI. Moneylife, much before (in December 2010) the scheme collapsed, had pointed the dubious modus operandi of the scheme ( Again SEBI ignored and remained silent.

In June 2011, frustrated with the mushrooming MLM schemes, the Kerala police started an investigation into these schemes and closed many of them. The police admitted noticing frauds amounting to over Rs1,000 crore in the state. Following the hue and cry from a number of investors, investigating agencies from Kerala started probing several multi-level marketing (MLM) companies—two prominent names among these were Tycoon Empire International and Bizarre group of companies. It arrested some of the promoters. Many of these cases had inter-state ramifications and were handed over to the crime branch in Kerala. Media reports have quoted Jacob Punnose, director general of police (DGP), Kerala, as saying that these investigations would be completed within five to six months. Chennai-based Tycoon Empire International had collected Rs370 crore from 50,000 investors, while Bizarre group collected Rs55 crore from depositors. Besides these two names, another MLM company cheated people of around Rs300 crore. It operated 14 accounts in a private bank, using false names and addresses.  ( MLM company Nano Excel came under the scrutiny of the Karnataka police after it cheated its investors for Rs9 crore.

In November, Jaipur-based multi-level marketing (MLM) company, Gold Sukh, has allegedly duped over 1.75 lakh investors for over Rs200 crore ( company promised investors 27 times returns in just 15 months on their deposits for buying gold. Police arrested officials of the company and issued a red corner notice through Interpol against the absconding directors of the company.  

The chief minister of Rajasthan has asked officials to draft a bill against fraudulent MLM schemes against the backdrop of the on going investigation in the multi-crore Gold Sukh scam.

Even while the EOW Mumbai was investigating SpeakAsia scam, it successfully arrested a fraudster of another MLM company. In October, EOW arrested Rahul Patil, managing director of Symbiosis Gold Trade. Interestingly, when Mr Patil was bought to the local court in Mumbai, some duped investors—mostly women—hurled chappals at him. It promised Rs1.20 lakh profit at the end of year apart from the actual investment of Rs1 lakh.

EOW Mumbai, in November 2011, unearthed another fraud by MLM scheme, Yellow Sapphire Multi-Trade Pvt Ltd, after it cheated around 2,000 investors. According to the company’s scheme, on investing a sum of around Rs6,000, one would get a gold pendant worth the invested amount along with additional Rs840 on introducing two new members to the scheme.

Despite the EOW’s strict action, many schemes continue to flourish. In fact schemes which in past have duped investors have made a come-back. For instance, Gold Quest, which came under the scanner of investigating authorities, is once again trying to spread its reach to the investor. The company, registered in Singapore, has been banned in many countries. It has re-launched itself in India and is said to be successful in attracting new investors from Mumbai.  Gold Quest has now renamed as Q-Net or Quest Net, is selling a certain products including watches, holiday packages ranging from anything between Rs30,000 to Rs7 lakh. The company started by selling limited edition numismatic gold coins through a pyramid structure for Rs30,000. It claimed the coins were made in Germany and will appreciate in value, over a year, which will and fetch huge returns to the buyer.

Moneylife Foundation, a not-for profit organisation which spreads financial literacy, had send an memorandum to the Prime Minister’s Office urging the PM and others to completely ban MLM companies in India or bring these companies under the regulation of either RBI or SEBI. (

Hope in 2012 the government brings a strong regulation to curb MLM and pyramid schemes, in the interest of the public at large.




3 years ago

Hello Friends, since i got my FIR registered in the month of August, it has been three months QNET has failed to re-start the "SYSTEM" In mumbai. First they had to cancel their grand celebration planned to be held at "Holy Spirit Hospital" Hall in andheri-east.

Later these QNETERS tried to do a "system" in Islam Gymkhana and had to cancel that also.

It is said that the third time these people placed advertisements in newspapers of mumbai to invite people into investing into a "Business Opportunity" and were holding that meeting in hall in dadar-west.

It is being said that today morning crime branch officials raided several residential places of QNET leaders all over mumbai and the following were detained/arrested.

Vivek Kumar Singh

Shashi Bushanrameshwar Pandey

Namrata Pandey

Sabina Mathews

Vijay Mathews

Jagdev Singh Parmar

Rohit Chandra

Mahesh Bhansali

All the above people have shared the "proceeds of crime" and huge amounts of money had been transferred into their bank accounts under the guise of "commissions paid". Sources say these huge amounts of money has been raised by running a money circulation scheme in India under the guise of "ecommerce" by QNET India.

It is now upto the rest of QNET IR,s to decide whether they want to continue to be part of this crime of "money circulation scheme" or they want to join the investigation and help the police and become "Government Aprovers".

It is your choice you want to become a accused in this crime, because some day some one will surely report you, it is better to give up this "white collared crime" now itself, then land into trouble later.

I appeal to you all IR,s to give this anti national activity once again, Please do not forget this is not happening the first time. Previously also in chennai assets,properties,cars, bank accounts etc of all TOP IR,s and team leaders were sealed by chennai CID.



In Reply to gurupreet 3 years ago

gurpreet bhai,cigrate aur whisky jismain billion dollar ja reha hain logo ka,pepsi aur cola jismain billion dollar ja reha hain logo ka aur mar bhi rahe hain,aur srif ek actor jo advertise karta hain ya advertisemnt company pura paisa rakh leti hain,uske liye kyu fir nhi ki,jisse sara paisa india k bahar ja reha hain,aur log mar rahe hain,iss jahar ko pi k,jis network marketing k pichhe aap pade ho usse bahut logo ko fayeda hota hain kyuki ye person to person product selling hoi hain,maine iska holiday pack liya hain,aur wo market se bhi sasta hain,aur sath main ager koi mera friend ager holiday per jana chahta hain to usko advise deta hu usmain usko bhi profit hota hain aur mujhe bhi,(advertisement main to jahar bhi bik jata hain aur sara paisa ya to add company khati hain aur ya fir pepsi cola cigrate aur whisky wali company)isko ban karna jaruri hain na ki direct selling ko,please dont do this logo ki bad duaa lagegi tumko jo iss business se kuch kamana chate hain unki kyuki koi mediam cat iss biz se kama sakta hain aur high amount kyuki ismain advertisement company ko profit nhi milta,


In Reply to anju 3 years ago

Good Anju Keep it up nice
sab aam admi ke piche pad jate hai paise walo ka paisa kamane me koi dikkat nahi sirf aam admi ko hai chutiye hai sale sab jo mlm ko froud bol rahe hai khud konse dudh ke dhule hua hai baiman hai sab

jitu moni

In Reply to satish 3 years ago

Complaints are pouring in, a fact accepted even by ACP Mumbai Police. Read his interview and a dashing filmi blowup of Guru :-)


3 years ago

Now Absconding Accused Vijay Easwaran disowns "QNET INDIA"

These are experts taken from the interview of Absconding Accused Vijay Easwaran

“QNET operates in India through a Franchise company hence Absconding Accused Vijay Easwaran has no involvement in it, he is neither a director nor a shareholder of Qnet India.

He further threatened to seriously think of Pulling out of INDIA.”

BOSS, you are talking of pulling out? YOU and YOUR SCAM will be KICKED out of my nation INDIA wait and see and this will not be the FIRST TIME that you are KICKED at your FAT A$$ and thrown out, will follow your SHAM company and expose it till you call it QUITS, the sooner you PULL OUT the better warna you know that saying “Badey Beaabroo ho kar terey dar sae nikley”

So Mr. Absconding Accused Vijay Easwaran if you have a BRAIN to think of new new SCAMS there are people who can work together to EXPOSE your SCAMS...r u ready for it now….hahaha


3 years ago

Seminar of Illegal MLM/Money circulation/Binary Marketing Schemes on 20th of September 2013 at 3.30 Pm, Free entry, Please register A.S.A.P.

Come on Friends a golden opportunity for us LIKE minded people to come together and share our thoughts and experiences regarding this menace being played in India on the name of MLM/Network marketing and what not. LETS MEET !! YES !!

Saradha, Speak Asia, QNet, City Limouzine, StockGuru India, Sahara, MPS Greenery, NMart Retail… All these start as hot, new, investment opportunities and as alternative careers that offer high earnings and ways to escape the drudgery of 9-to-5 jobs. But, eventually, most of them fetch only small additional income and, worse, encourage you to lure and mislead your closest friends and relatives. You need to know how multi-level marketing (MLM) schemes and ponzis can destroy a large chunk of your savings or push you into debt. Understand the mechanics of these schemes, the laws that are applicable to them and why regulators fail to rein in dubious enterprises before they cheat thousands of people. Understand the basics of how to keep your money safe—the first step to smart investment! Collective investment schemes are not even under SEBI's regulation.

Sucheta Dalal, founder trustee of Moneylife Foundation and Managing Editor of Moneylife magazine, is one of the best known financial journalists in India. She has worked with many of India's leading newspapers including Times of India, Indian Express, Economic Ti mes and Business Standard. She was awarded the Padma Shri in 2006 for her investigative journalism spanning over 25 years which included exposing the Harshad Mehta scam in 1992. Sucheta Dalal will be conducting this seminar.

For registration please Contact:
Seraphina / Komal
at 022-49205000 or
email [email protected]
Log on to


3 years ago

This video is so FUNNY, every one should watch it..will lighten up your day :)

Say thanks to creator James for doing this :)


3 years ago

All these words or sentences means the SCAM called QNET…

Listed below are some of the lines or words which mean nothing but QNET aka SCAM

Owner at Global marketing project
A Visionary at Global Marketing Project
Retired at I am THE COMPANY
e-Entrepreneur ! at Entrepreneur
Co Founder at My Office My Health
Global Marketing Projects at E- Enterprenuer
Works at Self Employed and Loving It!
Global Partner at Qnet
Worked at I am unemployable
Business Owner at Business Owner of a Global E-Franchise
Worked at Qnet
Past: THE V and QNET | Faith Egypt | Team Bring It

Global Entrepreneur at QNET (Official)
Past: InService Brotherhood Bootcamp
Works at Achieving the Dream
Chief Executive Officer at Unemployable
Works at Retired
Prosperity Consultant at Faith - Empowering You, Life & Business Coach, JPO Consultant, Networker at Tigers - Leveraging Vision andIndependent Consultant at QNET (Official)
Past: Genpact
Studies Leadership management style at Swiss E-learning Institute
Former Partnership at QI intl
Works at Self Employed and Loving It!
Worked at Honkong Based Multi Billion Dollar Company
Worked at Self-Employed (Business-Entrepreneur)
Retired of a JOB at Social Entrepreneur
Partner at ßusiness of Imp0rts & Exp0rts
Owner at E-Entrepreneur
Works at
Chief Executive Officer at Briltime Corp

If you see any of the above keywords on social media profiles of people trying to catch up with you ..just RUN RUN RUN :P



5 years ago

is rcsproperty such co.


5 years ago

Ms. sucheta dalal and all members of money life are doing excellent job by exposing govt. authorities. and there neglignece of handling such ponzi scheme . its seems that RBI and all the govt authorities are hopeless and doing nothing for common people.

The continues rise in inflation and very poor income source of the common man have no other option so these people are the victims of a such ponzi schme.
the corrupt and hopeless govt. are not doing anying . when they know everything

Vinay Joshi

5 years ago


Oh! You are knowledgeable!? If so are you aware about AP, HC order?!

Of course you’re knowledgeable but will you appeal the court order?! Tell MoneyLife.
Against whom it was?

You’re knowledgeable w/o the knowledge in the context. Do you know what is MLM? I’m sorry, educated you’re. Kindly excuse me!

‘Direct selling’ is not Ponzi! Reputed co’s have marketing teams. Never ML stated ‘DS’, aberration apart, conning takes place.

Kuizad, with due respect to you, you’re sadly mistaken discounting relevant laws.

You want me to give to you ‘MLM FRAUD’ statistics?! YES ALL INDIA! ML also doesn’t have it.

Where are the SpeakAsian’s gone today? VOCIFEROUS they were.

SpeakAsia has taken away THEIR SPEAKING ABILITY also.

Hope your QNet doesn’t take away your “Q” abilities!!!

I will not reply to any of your response, make it known. [yes, due respects to you always, even if you are using pseudonym or rep of any org.]



5 years ago

I can see how very ignorant you all are about MLM or Direct Selling as an industry and about QNet as a company.
For who do not know about the above and read your article would be mislead and those who do know and understand feel sorry that educated people talk such crap.

Satish B. Nimbalkar

5 years ago

Goog work moneylife totaly misused of power shame on media


5 years ago

MLM companies are flourishing only because they have some kind of understanding with some corrupt politicians. The Kerala Police say a Chennai based politician is behind the Tycoon Fraud.

Congratulation Moneylife for your relentless crusade against fraudsters.

May God bless Team Moneylife.

Vinay Joshi

5 years ago


An earnest request to put this msg along with some other[s] recd on the topic back to old postings had & LET SPEAKASIAN'S COME FORWARD who were the only brains.

After duping 2.3 mn investors SpeakAsia resurfaces in Brazil as investment co. – ‘Mister Colibbri’s’ –[ &] having links with AdMatrix & Seven Rings Int’l using same back end code.
But now the website is changed on EOW’s verification – but co’s investors name will not vanish!?


Where is Manoj Kumar wanted for last year or so? The perpetrator of the fraud now the largest investor listed. Why ‘Red Corner’ not issued?

Kindly make it known, make no mistake, Manoj Kumar & Ms Haren Kaur [both NRI] have foster fathers in Delhi!
They should be investigated under PMLA, which I had stated earlier also.

Further EOW in Mumbai has already seized their limousines & some other property, not disclosing their attachment proceedings with the immovable up market properties worth 200Cr, awaiting HC orders. It’s a fraction but.

It’s fallacious literate people falling prey knowingly!!! Now at least do not be fallible!!?!



5 years ago

First of all, congratulations for moneylife for advocating that this company was running an MLM scheme right from the beginning it started. However, what enthralls me is the fact that many people still believe that this company is going to make a comeback and give them the returns which was promised. I can only feel sorry for their stupid and despicable behavior. I would like to tell one thing to people invested in this scheme. You have screwed up. The chances of you getting the money back is negligible. There is no use blaming the government and the police. This is your mistake and accept it and learn from it. You will definitely make good money if you practice sound investment principles.

Vinay Joshi

5 years ago

Hello All,

SpeakAsia has surfaced in Brazil under diff name & EOW has already taken cognizance of it. Investigations are on.



5 years ago

money life ji..aap k article se main poori tarha sehmat nahi hoon...aap k shayad speakasia se kuch gehra tallukat hai shayad...main aapse poochna chata aap RMP,SECURELIFE YA TLC k baare me kyon nahi likhti..agar aapko logon ki itni hi parwaah hai to...RMP me bahut logo k paise lage huye hain...or company koi payment nahi ker rahi..kai months se RMP ka kahin pata moneylife k pages me RMP ka zikr kyon nahi hai....SECURELIFE abhi bhi logo ko loot rahi hai..magar aapko jaise koi khabar hi nahi...main poochta hoon asia kyon..kya moneylife ka maksad sirf speakasia ko band karna hi hai kya...mujhe to aisa hi lagta hai...

Of beasts of burden and disappearing donkeys

Modern India throws out its donkeys and asses. But Modern business in India wants young men to work harder than the patient—rarely complaining and possibly more efficient—donkeys

The other day I saw an ass.

This may come as no surprise to misanthropes and ever-loving cynics who see asses everywhere they go.

Even I, of humble and mild disposition, meet them often.
They are the ones who have opinions about whether having a convivial drink, or for that matter getting bacchanalian at a celebration deserves a public thrashing. They are the ones that think that who you were born to be more important than who you are, and they don’t actually know the difference; these asses will kill you if you cross imaginary boundaries and talk to someone of the opposite sex who is of ‘nobler’ birth. See I told you, they were asses!

Then there are the others who think that their God is better than your God, and if you don’t have a God, then God help you. Asinine as it may be to think that the all-seeing omnipotent omniscient unbelievably creative ‘it’ up there, here and everywhere actually wants to and is pleased by playing favourites, and that too by just one of the million trillion gazillion things on this and countless other planets, these geniuses will kill you and themselves for it, dying I presume with a self satisfied smug smile on their faces as they explode into nothingness.

There are of course asses of others kinds: white ones who don’t like black ones, brown ones who think white ones are the source of all their problems and possibly striped ones who can’t tell who is to blame at all. There are spectacularly intelligent asses  who believe that the reason the planet turns is because the light shines from, well, their asses and so they blithely go about doing whatever they feel, as the earth burns in their wake.

So as I said I see asses too.

But this was different. I actually saw one on the street. A full blown four-legged ass in the heart of one of the largest cities in the world in the 21st century! Of course, since I am not a zoologist I couldn’t swear it was an ass. It could have been a donkey. Is there a difference?

Anyway here was this lone ass darting across the street to avoid being run over by my car. Now asses aka donkeys as I knew them many years ago before the human varieties that I referred to earlier replaced them, are somewhat phlegmatic creatures, choosing to at best express themselves with an occasional braying sound. But this one seemed like he (maybe she?) was excited about something.

But what got me thinking was where have all the asses gone? At one stage I remember them laden with bricks meandering to a construction site. Or carrying clothes that the ‘dhobi’ was taking away to the local washing place or bringing them back starched and pressed. Or just hanging around in packs at random corners, much like teenagers apparently waiting for something, anything, to happen. And from time to time above the din, you would hear them—the loud braying that was both irritating and somewhat reassuring.

And they were interesting creatures that seemed to have a stoic, and yet not-boring disposition. I was told as a child never to walk behind one for they could and would kick. The saying “dig your heels in” seemed to be inspired by them: I have seen this washer man struggling to get one of them to move. No dice.

Over the years they slipped from sight, even from memory. Till the other day. And I began to wonder, what had happened to them. I know this is not as romantic a notion as musing about the swallows of Capistrano or some such.

But hey I liked these creatures: They were of service, they mostly didn’t complain and in an anthropomorphic way I thought they were cute especially after I had seen Shrek.

Maybe they disappeared or at least were disappearing because we had little use for these beasts of burden and unlike their fellow B of B’s they didn't have other uses like milk and cheese and even the occasional steak. (I hear that Cleo’s complexion was much enhanced by asses’ milk, but Shahnaz Hussein has not revived this Pharaonic tradition.)

And so with a sigh and a heave of the old chest, I went on with my evening and my life.

Till this morning. Same street corner, different day, and headed in the opposite direction: The car is stuck behind a handcart. Now handcarts are not uncommon in India, and the beast of burden in this case is a fellow human being. Unlike donkeys/asses these beasts have not disappeared or are disappearing. They seem to be a “viable” species in India.

Here was the interesting twist: the handcart was for delivery of domestic cooking gas cylinders. The puller of the cart which was admittedly a modernized version of the traditional wooden one, was a uniformed with company Bharatgas logo and all, young man.

It was the oddest thing of all. Modern India throws out its donkeys and asses. Modern India has mined from deep sea, hard-to-extract and then piped and bottled natural gas for Modern India’s kitchens. And Modern business in India wants young men to work harder than the patient—rarely complaining and possibly more efficient—donkeys.

We are a strange land. And I often feel like a stranger in it.
But it seems that we are a country full of asses after all.

(V Shantakumar is the former chairman & CEO of Saatchi & Saatchi in India and now the managing partner of Doing Think)




5 years ago

Shantakumarji has contibuted an article on an animal that is usually the focus of derision and maligning. Law is an ass is clearly witnessed in Calcutta where still richshaw is pulled by the two legged unfortunate animal. In busy metros the most feared vehicle is the two wheeled and motorised fish cart. If any one wishes to experience the fear visit in the early evening the coastal area after the fishermen had off-loaded their catch


5 years ago

What an asinine article. Surely Moneylife has better things to offer than meanderings of a mule!


5 years ago

Dear Shantakumar ji, excellent article, thanks. And presuming that you saw your modern young man pulling or pushing his handcart in Delhi or Mumbai, then you may not have to look further than:-

1) Rules pertaining to entry of motorised commercial vehicles in some parts of these two cities.

2) Rules pertaining to entry of three-wheelers of all sorts, motorised, battery or cycle, in some parts of these two cities.

3) Rules exempting dabba-wallas, mathadi headload workers, peanut and other stuff including country confectionaries made of jaggery only, and some others from not bringing in wheeled vehicles like handcarts and 4-wheel rehris into all parts of the city, including against flow of traffic on one-way streets.

4) Some more rules I will point you to.


By the way, have you seen how labourers brought in for shifting your personal effects to high floors of MS buildings are often not permitted to use the lifts, not even the service lifts if that building has one, along with servants sometimes, and dogs?

Makes me wonder, for whom and where does the ass bray.

Humbly submitted, and I liked your article.

Veeresh Malik


nagesh kini

In Reply to malQ 5 years ago

Well said, dear Veeresh!
I keep wondering why it is said - "Law is an ass".

Some time back I got my office assistant to get a bike to go round in then known as Bombay down town Fort area. A traffic cop deflated the tyres saying 'slow moving not allowed'. So much for non-polluting two-wheelers. Is it why they call law an ass?

We have so many outdated centuries old statutes in our books that need to be scrapped. The Parliament has yet to find time to even pass a one line resolution conveying the Non-Sense of the House!

Why blame the donkeys, our army still needs their cross bred off springs, the mules, to cart heavy military hardware on the slippery northern mountain trails. A task that can't be done by any other animal

We simply can't wish away these hardy beasts of burden. Long live the Ass!

Plunging sales, strikes—a year to forget for auto industry: 2011 Review

After a rough ride in 2011, the Indian auto industry is looking with optimism to the New Year. The industry is hoping that the forthcoming Auto Expo in the national capital will provide the much-needed boost to the sector and will help it cruise in the year ahead

New Delhi: A year that began with a bang only to fizzle out in the end with car sales posting the steepest fall in nearly 11 years; a year marred by strikes—2011 will be one that the Indian automobile industry would like to forget in a hurry, reports PTI.

At a time when sales were hit badly by higher interest rates on automobile loans and costlier fuel, crippling labour disputes affecting firms like Maruti Suzuki, General Motors and MRF made the industry hit the headlines for all the wrong reasons.

Nevertheless, one of the major milestones for the year for the industry was the launch of a new brand identity by the BM Munjal-led Hero Group, following the break-up of erstwhile Hero Honda, and announced its strategies for a solo journey without former Japanese partner Honda.

The year gone by also witnessed some exciting new model launches, including Hyundai’s 800-cc car Eon, and some intense moments between the West Bengal government and Tata Motors on the return of land in Singur following the relocation of the Nano plant.

Yet when it came to sales, it was a case of gravity finally catching up with the zooming sales that were witnessed in the previous year. After bidding adieu to the 2008-09 slowdown and posting robust growth of over 25% last fiscal, it is now likely to see a low, single-digit increase in vehicle sales in 2011-12.

Indian car sales hit an all-time monthly high in January 2011, registering a jump of 26.28% to 1,84,332 units. However, with rising interest rates and fuel prices, the sales started moderating during the year.

With rising inflation, the Reserve Bank of India (RBI) started increasing the key policy rates, leading to a hike in interest rates on auto loans. It was a double blow for the auto industry as fuel prices, especially petrol, kept on rising throughout the year.

Vehicle sales started falling again with the industry fearing a comeback of the ghost called ‘recession’.

The Society of Indian Automobile Manufacturers (SIAM) lowered its growth forecast for 2011-12 twice during 2011 after announcing it for the first time at the beginning of the fiscal. It is expected to revise it downward again in January on account of sluggish demand in the last couple of months.

On a year-on-year basis, car sales in India have been declining since July, mainly due to the severe impact of labour issues on Maruti Suzuki India’s (MSI) production.

Sales registered their steepest monthly decline in nearly 11 years in October this year, tanking by 23.77% on account of a huge drop in output by MSI due to labour trouble, coupled with high interest rates and fuel prices.

The car segment, however, witnessed a turnaround with 7% growth in sales in November on account of a marginal revival in demand, coupled with a low base. Sales in December are likely to be lower than the November numbers, SIAM said.

Labour strikes, which hit the country's largest car-maker Maruti Suzuki India severely, did not spare other auto-makers either. MSI suffered a total of 60 days of production losses due to three instances of labour unrest at its Manesar plant, which mainly produces the Swift.

In June, a 13-day strike brought production to a standstill. This was followed by another standoff on 29th August between the management and the workers, which lasted for 33 days.

Nevertheless, not all was gloom and doom in 2011 and some raised a toast and said cheers too! India's largest two-wheeler maker, Hero MotoCorp (formerly Hero Honda), announced a new brand identity at a glittering event in London that was attended by tennis player Boris Becker, singer Akon, F1 driver David Coulthard and Bollywood superstar Shah Rukh Khan.

The BM Munjal-led Hero Group announced plans to set up two new manufacturing plants in the country and will pump in more investments in the next five years than it has done in the last 27 years during its partnership with Honda.

Amid the slowdown blues, Korean auto major Hyundai Motor Co launched its entry-level compact car Eon that has been developed specifically for the Indian market. The 814-cc small car was pitted against India’s best-selling Alto model from rival MSI’s stable.

Although Hyundai was planning to sell about 12,000 units of the Eon every month, sales are getting affected because of the overall negative sentiment in the market. It is currently selling around 6,000-7,000 units every month.

During the year, Honda announced a foray into the highly competitive low-price compact car segment in India with the launch of its Brio model, competing against the likes of the Hyundai i10, Maruti WagonR and General Motors Chevrolet Beat, which are priced in a similar range.

Toyota Kirloskar Motor also entered the small-car segment with Liva, the hatchback version of its sedan Etios. The company later introduced it with a diesel option as well.

The year witnessed continuation of the bad blood between West Bengal’s ruling party, the Trinamool Congress and Tata Motors, which had shifted its Nano plant out of the state in 2008 following violent protests.

The 997 acres of land leased to Tata Motors was vested by the state government vide the Singur Land Rehabilitation and Development Act, 2011, for return to farmers.

Later, a division bench had stayed distribution of 545 acres of land leased to Tata Motors on an application by the auto-maker, which appealed against the single bench order upholding the vesting of the Singur land leased to it.

After that, 31 component manufacturers had moved the court seeking a stay on distribution of the land allotted to them. The bench stayed distribution of the 290 acres of land allotted to 57 vendors of car components till disposal of the cases challenging the vesting of the land by the government.

Last month, the Calcutta High Court granted a stay on distribution of land allotted to vendors at Singur beside the Tata Motors’ Nano project plot by the West Bengal government.

In other developments during the year, in May, the Cabinet approved divestment of the government’s entire 95.38% stake in three-wheeler maker Scooters India, which has been suffering losses since 2002-03. Its entire net worth had eroded by 2008-09.

However, toward the end of the year, the government put on hold the proposed sale of the sick PSU and decided to review the proposal ‘holistically’ before taking a final decision amid volatile market conditions.

After a rough ride in 2011, the Indian auto industry is looking with optimism to the New Year. The industry is hoping that the forthcoming Auto Expo in the national capital will provide the much-needed boost to the sector and will help it cruise in the year ahead.


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